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Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
 KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely available, HFO propelled a long period of robust growth in international shipping, which carries over 90% of intercontinental trade by volume each year. For many, it is the lifeblood of the maritime shipping industry.
But HFO’s low price does not reflect its impacts on the environment and human health. The sulfur content of HFO can be up to 35,000 parts per million. It is the reason that maritime shipping accounts for 8% of global emissions of sulfur dioxide (SO2), making the industry an important source for acid rain as well as respiratory diseases. In some populous port cities, such as Hong Kong, shipping is the largest single source of SO2 emissions as well as emissions of particulate matter (PM), which are directly tied to the sulfur content of fuel. By one estimate, PM emissions from maritime shipping led to 87,000 premature deaths worldwide in 2012.
The International Maritime Organization (IMO), the governing body of international shipping, has made a decisive effort to diversify the industry away from HFO into cleaner fuels with less harmful effects on the environment and human health. Effective in 2015, ships operated within the Emission Control Areas (ECAs) covering the Economic Exclusive Zone of North America, the Baltic Sea, the North Sea, and the English Channel will begin to use Marine Gas Oil (MGO) with allowable sulfur content up to 1,000 ppm. Starting from 2020, ships sailing outside ECAs will switch to Marine Diesel Oil (MDO) with permitted sulfur content up to 5,000 ppm.*
That tectonic shift also creates openings for a variety of new fuels. Liquefied nature gas (LNG), newly abundant and relatively affordable, is attracting the attention of many shipping companies. Although the lack of infrastructure and the uncertainty of future prices have slowed the “dash to gas,” many expect LNG to establish itself as one of major alternatives to HFO in the future. Lloyds Registry, a shipping classification society, expects LNG to take 11% of the market share in 2030.
Meanwhile, Stena Teknik, a Swedish company, is testing methanol, another natural gas product, but one that requires less storage space in a ship and is relatively easier to handle. While natural gas-based fuels may sometimes offer questionable climate benefits, due to methane leakage concerns, the IMO’s low-sulfur regulation may create needed openings for other zero-sulfur, low-carbon marine fuels. Tests using fuel cells on the Viking Lady, an offshore supply ship, demonstrated promising results.
Wind kites and solar panels have already been installed on numerous ships to supplement marine diesel engines. Even HFO will not completely disappear from the menu of marine fuels. Combined with scrubbers that capture more than 99% of the sulfur from the exhaust gas, HFO will continue to play an important role. Lloyds Registry reckons that HFO will represent about 40% of fuel use by 2030.
The shift to cleaner but pricier low-sulfur fuels is likely to heighten interest in the “fifth fuel”: energy efficiency. Historically, the maritime shipping industry, where energy often accounts for over half of operating costs, has responded to escalating fuel prices with innovative energy-saving strategies. To cite a recent example: in 2008, as fuel prices went through the roof, shipping lines cut their operating speeds by as much as 50%, helping many companies stay afloat amid one of the worst downturns in history. In an analysis of satellite data on ship operations, we’ve estimated that the industry can further slash 100 million ton of fuel use by 2030 through wider implementation of energy-saving measures that were adopted by industry leaders in 2011.
This is in addition to savings of 90 million tons of fuel because of the Energy Efficiency Design Index (EEDI), a mandatory program that will require new ships to achieve certain efficiency targets beginning in 2015.
The continued diversification of marine fuels and improvements in energy efficiency have important implications. First and foremost, they may alleviate concerns about the availability of low-sulfur fuels. Figure 1 illustrates one possible scenario, using our forecast on future marine fuel consumption and energy efficiency improvements as well as Lloyds Registry’s estimate of market shares for HFO and LNG. The efficiency improvement of the legacy fleet is the greatest force driving down the need for low-sulfur fuels, equivalent to adding about 110 “negatons” of fuel, or almost 24% of projected demand. HFO combined with scrubbers, EEDI, and distillates (MGO plus MDO) are almost neck and neck, each representing about 20% of fuel use in the chart. LNG is coming of age, with its share doubling between 2020 and 2030. Other fuels, such as renewables, fuel cells, and biofuels, are expected to hold only small market shares in 2030.
Second, the new fuels are on a collision course with IMO safety regulations concerning flashpoint, the temperature at which a fuel can vaporize to form an ignitable mixture in air.
The IMO currently requires marine fuels to have a minimum flashpoint of 60°C. But low-sulfur fuels have a lower flashpoint (50° to 55°C), meaning that they are “off-spec” and cannot be used under the IMO rule. The flashpoint requirement, which went into effect in 1976, was meant to provide a large margin of error to ensure the temperature of the engine room (normally below 45°C) does not exceed the flashpoint in any circumstance. But according to industry heavyweights such as Maersk and BIMCO, modern technologies such as advanced ventilation systems provide an adequate safety margin, and they argue that keeping the flashpoint requirement will cause the industry to miss the opportunity represented by the increased availability of low-sulfur, low-flashpoint fuels. Industry and member states such as the U.S. are urging the IMO to accelerate its consideration of an amendment to the flashpoint requirement.
By: Haifeng Wang / The International Council of Clean Transportation
*Implementation of the requirement is subject to a review of fuel availability to be completed by 2016.
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Saturday, 18 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Wilmar Investment Holdings
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- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Aditya Birla Group - India
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- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
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- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Minerals Council of Australia
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